Foxhill Court [2006] QBCCMCmr 629 (29 November 2006)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

I hereby order as follows –
1. that the body corporate for Foxhill Court replaces the roof covering of the building being 1 and 2 Compass Close, with the same or similar materials;
2. that the two lot owners, the Applicant and Desiree Davey (Ms Davey) owner of Lot 1, pay equal contributions to the body corporate for the replacement roof;
3. that the Applicant and Ms Davey agree on a suitable roofer within 21 days of the date of this order, or failing such agreement, the Applicant may select the roofer, and thereafter the roofer shall be engaged by the body corporate within a month of the date of this order to commence work as soon as practicable;
4. that if the roofer recommends repair or replacement of roof timbers inside the roof once the roof covering is removed then the body corporate is liable for these repairs and contributions shall be made in equal shares by the Applicant and the Ms Davey;
5. that the Applicant selects suitable insurance cover within one month of the date of this order, to be effective at the agreement of the insurance company, payable by the body corporate and raised by equal contributions between the Applicant and Ms Davey and, if the Applicant pays the premium, one half of the premium is to be reimbursed to the Applicant by Ms Davey within 14 days of the premium being paid by the Applicant, and may be recovered directly by the Applicant as a debt.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0547-2006

"Foxhill Court" CTS 15711

APPLICATION

This is an application made on 11^th July 2006 and amended on 19^th September 2006 by Andrea Bowring (the Applicant) owner of Lot 2 in the scheme against Desiree Davey (the Respondent) owner of Lot 1 in the scheme for an order that the Respondent shares the cost of roof replacement and thereafter shares the cost and upkeep of a Home Building insurance policy.

JURISDICTION

"Foxhill Court" Community Titles Scheme is a community titles scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module). There are two lots in the scheme, also known as a duplex, created under a Building Unit Plan of subdivision.

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

SUBMISSIONS

The Applicant says that the duplex roof was damaged during Cyclone Larry in March 2006. As at July 2006, it was still covered with a tarpaulin held down with cement blocks. The Applicant has been advised by two plumbers (sic) and a building inspector that roof replacement is absolutely necessary before the next wet season commences.

The Applicant has suffered water damage to her lot, and had to have all her floor coverings replaced. The Applicant’s insurance company has accepted the claim but will not provide new floor coverings until the roof is replaced.

The building was uninsured at the time of the cyclone for which the Applicant blames the Respondent who would not share insurance costs. The Applicant still refuses to do so.

The Applicant and the Respondent had a meeting on 25th May 2006 to consider what to do. They decided that the Applicant should engage a building inspector to inspect the whole roof from the outside and inside through the Applicant’s ceiling access hole; and that both parties were to obtain two quotes for insurance. The Applicant found out that insurance companies would not insure until the roof was replaced since the building was not covered by insurance during cyclone Larry. The Applicant says that the Respondent did not seek quotations as agreed.

The Applicant attaches a letter from Bryan Peach, Building Consultant who advises as at 1^st July 2006 that "the roof cladding .... Has reached its effective life (sic) and needs to be replaced as soon as possible. Rust holes are showing through in numerous places and internal water damage could result if heavy rain and high winds were to come in combination."

The Applicant also wrote to the Respondent on 6^th July 2006 saying that she had presented two insurance quotations to her but that the Respondent had refused to pay. The Applicant had by then upgraded the tarpaulin on the roof, and again invited the Respondent to supply a quotation for replacing the roof.

The Applicant provided a quote dated 25^th August 2006 from Roof Restorations Aust. for total roof replacement for $18,128.00 inclusive of GST; a quote dated 11^th April 2006 from Ben and Viv Harms for roof replacement in either zincalume ($13,600) or colourbond ($14,700); and a quote dated 25^th August 2006 from John Heaney Roofing for re-roofing in colourbond for $ 11,407. Both John Heaney Roofing and Ben and Viv Harms advise that if any battens or timber work needs replacement this will be extra to the quoted price.

The Respondent made a submission on 15^th September 2006. She says she does not have the money with which to pay for a new roof. She has served in the Navy and was discharged for medical reasons. She is awaiting a payout from the Department of Veterans Affairs. Her only income is from pensions and she pays a mortgage and rates. She has sought financial help about re-mortgaging to fund the new roof but since she is not working she has been unsuccessful. She has also tried to get her superannuation paid early without success.

The Respondent also says that "her side" of the roof is in a better condition than the Applicant’s. She has been patching it from time to time. She has the only interior access to the roof space within her lot, and she has been into the roof herself, and found what appears to be wet rot in a timber beam. She says that the inspector called by the Applicant did not mention this and that he did not go into the roof space. She fears that once the outer covering of the roof is off for replacement, that further damage will be noticed inside and the cost will be significantly more than has been quoted. She feels that a solution could be to put new sheeting just on the Applicant’s side, and she can continue with her patching maintenance for now. She says that the Applicant has failed to do patch repairs and that is the reason why her "side" is worse.

She provides photographs showing the difference in condition between the two sides of the roof, and showing discolouration on the Applicant’s side only.

The Applicant did not wish to exercise her right of Reply.

DETERMINATION

In this matter the interpretation of the legislation is not in dispute, but to some extent, the facts are. It is agreed between the parties that damage was done to the roof of the duplex by Cyclone Larry. The Applicant however says that a replacement roof is vital, whilst the Respondent says that since one part of the roof is in better condition, that only part of the roof needs to be replaced.

In a Building Unit Plan of subdivision, the body corporate is responsible for all roofing structures providing protection whether or not such structure is common property or part of a lot , and all roofing membranes that are not common property but provide protection for lots or common property (Section 109(2)(a) and (b) Standard Module).

The body corporate is also responsible for insuring buildings with common walls. The body corporate must insure the building for its full replacement value. (Section 128 Standard Module)

The body corporate is liable to pay any contribution that has to be made to the costs of reinstatement or repair if the reinstatement insurance is not the full replacement value of the insured property. (Section 128(5) Standard Module).

In a "duplex", lot owners sometimes do not think that body corporate status applies to them, but it precisely to guard against the kind of circumstance now prevailing in this scheme, that the legislation is drafted. Both lot owners, as sole members of the body corporate, are responsible for holding an annual general meeting at which time a policy of insurance must be decided upon, and a budget is approved for the sinking fund and the administrative fund. The sinking fund should look forward for 10 years.

Body corporate funds should be kept in a body corporate bank account to which agreed and regular contributions are made by both parties.

The Applicant says that the property was not insured because the Respondent would not agree to pay her share. I find this reasoning flawed in that the Applicant could at the date on which the Respondent refused to pay, have made an application to this Office for an order that the Respondent contribute equally to the insurance. In the meantime, the wise course would have been to pay the full premium herself and seek reimbursement through this Office if necessary. Simply not to have insurance cover for the building is not only unlawful but unwise in the extreme.

Equally, the Respondent now argues that it is because the Applicant failed to patch repair the roof that the roof is in such a dire state on the Applicant’s "side." Again, the Respondent could have requested that the Applicant maintain "her side" of the roof as a contribution towards the roof maintenance, or better still proposed a budget for roof maintenance towards which both the Applicant and the Respondent made instalment payments, and if the Applicant failed to concur with the Respondent, the Respondent could have made an application for help to this Office to require the Applicant to maintain the roof before it got in such a bad way.

Bryan Peach, Building Consultant says that the roof has reached the end of its life, that is, that it is old and that wear and tear is responsible for its condition. He says -

"Rust holes are showing through in numerous places and internal water damage could result if heavy rain and high winds were to come in combination."

This seems a somewhat incongruous statement about a roof which is covered by a tarpaulin held down with cement blocks. The photos taken by the Respondent, although I do not know what date they were taken, do not show any visible part of the roof covered by a tarpaulin. There are what appear to be cement blocks along one edge on the Applicant’s "side."

Section 271 Act allows an adjudicator to invite persons whom the adjudicator considers may be able to help resolve issues, to give the adjudicator information. (Section 271(1)(a)(i)).

In such circumstances, I contacted the three roofers from which the Applicant has obtained quotations, to ascertain whether it was possible or feasible to repair one part of the roof and then another part at a later date, thus enabling the body corporate to undertake roof repairs in two stages.

John Heaney was of the view that whilst it would be physically possible to roof only one part of the roof, he recalled that both sides had in his view "had it" and that it would be a waste of time to do one part and not the other.

Corry Cats of Roof Restoration Aust was contacted on his mobile phone but unable to recall the roof without looking at details in his office. Unfortunately he was not in the office at times which coincided with mine.

Ben Harms said that it was not totally impractical to do one side at a time, but probably not economical to do so, in that capping and ridges would have to be fastened twice. He said that the sheets were bad at the ends, and he could not see how both sides were not suffering ingress of water and thought that the Respondent would be getting water into her soffiting. Further, if only the Applicant’s side was repaired, there was a possibility that water penetrating the Respondent’s side would in fact creep back into the Applicant’s side meaning that no guarantees could be given on the "half" repair being effective.

It would therefore seem to two roofers to be a false economy to repair only one part of the roof, even if one side is worse than the other. Even the Respondent’s "better side" is in need of replacement.

In the circumstances I can make no order other than that the body corporate raises a special levy payable as to one half by the Applicant and one half by the Respondent for the replacement of the roof covering and any other roof repairs as necessary. I can find no easy solution to this dispute. If the Respondent is unable to afford to maintain the property, and to make contributions to the body corporate, she may have to consider selling. In the long run, to allow water to enter the fabric of the building is to allow the homes of both the Applicant and the Respondent to deteriorate.

The parties may be assisted to know that the body corporate, as an entity, has the power to borrow funds which may be secured against the common property or on security agreed by the lender, although there may not be much common property in this scheme. Both lot owners must consent to this. (Section 102 Standard Module) Any money borrowed in this way is a liability of the body corporate and will be repayable by any future lot owners in contributions.

The order I shall make is therefore that the body corporate effects repairs to the roof by replacing the entire roof with similar materials as currently used, and by using a professional roofer as chosen by the body corporate.

The Applicant and the Respondent, acting as the body corporate committee, shall, by correspondence if necessary, select the roofer of their choice, or seek further quotations if required, the whole within 21 days of the date of this order. If the parties cannot agree, the Applicant may select the roofer. The roofer’s bill should be made out to the body corporate for Foxhill Court, care of the Applicant and the Respondent as named, together.

The roofer is to be engaged within one month of the date of this order and work commenced as soon as practicable. This takes us into the Christmas period, but the chosen roofer can advise his availability.

As there are insufficient funds in the body corporate sinking fund, the two lot owners shall contribute in equal shares to the roofer’s bill as if a special levy had been raised by the body corporate. If there are further timber works required when the roof covering is removed, the body corporate is liable for these repairs and contributions shall be made in equal shares by the Applicant and the Respondent.

I advise that a debt to the body corporate may be secured, following judgment in the Magistrates Court, on a lot-owner’s property and taken from purchase funds in the event of a sale. In this matter, since the order is that the Applicant and the Respondent pay one half the roofer’s bill as if it was a special levy of the body corporate, if the Respondent does not pay her contribution, then the Applicant may, on behalf of the body corporate, or as the Applicant in this application, commence a proceeding for contravention of an adjudicator’s order under section 288 of the Act. Such a contravention can result in a fine of up to $30,000.

The body corporate records should show that the roofer’s bill was a body corporate expense and that a special levy was raised as to a half share each on the Applicant and the Respondent, payable at the time for payment of the bill.

Further, the body corporate must insure the building for full replacement value. The Applicant is to select suitable insurance cover within one month of the date of this order, to be effective at the agreement of the insurance company, payable in equal shares between the Applicant and the Respondent and, if the Applicant pays the premium, one half of the premium is to be reimbursed by the Respondent to the Applicant within 14 days of the premium being paid by the Applicant. Such payment can be pursued as a debt in the Magistrates Court by the Applicant.

I note that there is some suggestion by Bryan Peach that if the scheme was changed to a subdivision under a Standard Format Plan, then each party would be responsible for their own "side" of the roof, in effect; the roof would be part of each separate lot. Whilst this is true, the process required to change an existing subdivision of land is likely to be very costly, even if it was successful and approved by the local authority, requiring a re-survey of the land, new plans to be lodged, and possibly building works such as mentioned by Mr Peach. Furthermore, the situation with regard to insurance would not change where a building shared a common wall, that is, the body corporate as an entity would still be required to insure the whole building including the roof under a Standard Format Plan. (Section 129(2) Standard Module).

I advise both the Applicant and the Respondent that the keeping of good body corporate records is not only a legislative requirement but a good selling point. If the body corporate bank account can be established (which is a requirement under the Standard Module) and regular contributions made as agreed at an annual general meeting, especially with regard to future major maintenance and insurance premiums, then the property is much more attractive to a prospective purchaser. The maintenance of elderly buildings is a concern to many bodies corporate and especially to lot owners in small schemes or duplexes. There is only one way to deal with such maintenance and that is by budgeting for likely events and making regular contributions as set at the annual general meeting by the lot owners, however small the scheme.

I have a certain sympathy for the Respondent, but a lack of cash has never been a reason for being excused an obligation, and I advise her to take all steps at her disposal to liaise with the Applicant to obtain the quotations most amenable to her, and to hurry the funds which she expects from the government department, otherwise there appears to be a real danger that she may have to sell her home, at a time when the price would not demonstrate a well –maintained property.

Both the Applicant and the Respondent might benefit by contacting the information section of this Office on 1800 060 119 for brochures and information on managing a body corporate. Information and fact sheets on specific topics may also be downloaded from the website www.bccm.qld.gov.au

Number of Scheme:	15711
Name of Scheme:	Foxhill Court
Address of Scheme:	2 Compass Close EDGE HILL QLD 4870

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Foxhill Court [2006] QBCCMCmr 629 (29 November 2006)